A Capehart Scatchard Blog

Permanent partial disability awards are often mysterious, partly because New Jersey compensation is so different from our neighboring states. For those who are used to the laws in Pennsylvania and New York, permanency awards in New Jersey can make no sense. Here is a sample of common questions about our system in New Jersey:

Question: How can someone who is back to his or her job doing full duty receive an award for permanent partial disability?

Answer: Unlike most states whose compensation systems focus on lost wages, New Jersey has two indemnity payments. The first, temporary disability benefits, depends on actual lost wages. They are similar to payments in other states. These benefits end at maximal medical improvement or return to work, whichever occurs first. But permanency payments are based on loss of function, not directly related to lost wages. The loss of function need not arise at work; it can be loss of function in non-work activities, like sports, hobbies, home activities or the like. Someone who is back to work doing the same job following surgery will still get an award of partial permanent disability.

For example, if an employee has rotator cuff repair surgery and returns to work performing the same job duties as before the accident, the employee is still eligible for a permanency award if he or she has lost function in the activities of daily living.

Question: What kind of testimony does a Judge of Compensation need to hear to decide to make an award of permanent partial disability?

Answer: The New Jersey Supreme Court said in Perez v. Pantasote, 95 N.J. 105 (1984) that an employee must provide both objective evidence of impairment in the body member plus either evidence of a lessening of working ability or a substantial impact on non-work activities. The first part of this test is easy to prove if there is a positive MRI or surgical record given that this would be considered objective medical proof of impairment. The second part of the test depends on the testimony of the claimant in court. The claimant will describe the impact of the injury on work or non-work activities, discussing activities that he or she can no longer perform or have had to curtail. If there are no complaints about work activities, the Judge will focus on statements that the claimant makes about hobbies, household chores, and basic daily activities like sleeping that have been affected by the work accident.

Question: Does a claimant who has had surgery ever not receive an award for permanent partial disability?

Answer: There are many claimants who never file for permanent disability awards who have had surgery. One is not eligible for such an award unless he or she files a claim petition in the Division of Workers’ Compensation. Almost every claimant who has surgery and who files a claim petition will receive an award of permanent partial disability because there will almost always be testimony that the surgery has left the claimant with a substantial impairment of work or non-work activities. The only exception would be a claimant who comes to court and testifies that the work injury and surgery have had no impact at all on work or non-work activities. The undersigned has never encountered this in his practice.

Question: How does an adjuster reserve a case following surgery? Is there a particular formula that a judge uses to determine an award?

Answer: There is no cheat sheet or document that New Jersey judges use to make awards. Unlike almost every other state, New Jersey does not follow the AMA Guidelines to Impairment. Every case must be assessed on its own merits, and the Judge must factor in the objective evidence and the testimony regarding the impact of the injury on work and non-work activities. Both sides obtain permanency evaluations, and the judge reviews all of these reports. The permanency evaluators are generally far apart in their assessment of disability.

As a general rule, operated cases are worth more than unoperated cases on the theory that if a medical condition requires surgery, it is probably more serious than one that does not require surgery. For most operated cases involving one surgery to the back, leg or shoulder, for instance, a practitioner knows that the loss of function which may ultimately be awarded may be around 25% of partial total, give or take a few percentages points. An award of 25% of partial total means that the worker has lost about a quarter of his or her function. So an operated rotator cuff case with no serious complications may be reserved around 25%. But the ultimate award will depend on the objective medical evidence and the testimony before the particular judge who is hearing the case. Experienced adjusters and defense counsel have a sense of how to reserve for operated and unoperated cases.

Question: Have disability award percentages changed over the 36 years since the 1980 Amendments?

Answer: Not really. The big change since the 1980 Amendments has been the escalation in the amount of the award, not the percentage of the award. An operated herniated disc surgery without complications in 1980 would generally be reserved for 25%, as it is today, give or take a few percentage points. However, the dollars have dramatically increased. For example, in 1979 before the amendments took effect, an award of 50% permanent partial disability was valued at $12,000. Today in 2016, an award of 50% permanent partial disability would be valued at $174,300.

One kind of injury where percentage awards have increased concerns head injuries. Medicine and science have revealed a great deal more about head injuries and concussions in the past 10 years, resulting in much higher awards than in the 1980s.

Question: Why are finger injuries often put in terms of the hand and not the schedule for fingers?

Answer: New Jersey has scheduled awards and unscheduled awards. Fingers and hands have their own schedules. They are not like partial total awards for parts of the body not on a schedule, such as the back, neck, shoulder, hip, trunk, and internal injuries. Scheduled awards are valued lower than unscheduled awards. A loss of function of 25% of the index finger is paid over 12.5 weeks. A loss of function of 25% of the hand is paid over 61.25 weeks. By comparison, an award of 25% for a back injury is paid over 150 weeks. Claimants argue that the loss of function of the finger impacts the function of the hand and therefore contend that they should receive an award in terms of the hand, not the finger.

In the end, the Judge of Compensation has to decide whether the finger injury impacts the hand to such a degree that the award should be converted to a hand injury. If the finger injury only impacts the function of the finger, then the award is in terms of the finger. The Judge reviews the evaluation reports submitted by counsel for guidance. Sometimes the judge will convert the weeks for the finger to the exact same number of weeks in the hand, meaning no dollar increase in the award; other times, the judge may award a percentage in the hand that is somewhat higher than the weeks for the finger schedule.

There is general recognition that finger and hand awards are very low in New Jersey relative to unscheduled losses. There are bills being proposed to raise such awards. For instance, an award of 60% of the hand amounts to $38,675 at 2016 rates; an award of 60% of partial total for the back amounts to $250.920. Why should a back or shoulder injury of 60% be worth more than six times a hand injury of 60%? There is no answer to that question. This is perhaps an anachronism based on an assessment from many decades ago by the Legislature that hand injuries should be considered less important in the workplace and outside the workplace than injuries to the neck, back, shoulder, hip or trunk.

Question: How can an employer produce evidence that may result in lower permanency awards?

Answers: There are a number of things employers and carriers can do to reduce the percentage of the award.

Credits for previous disability save money for employers. So if an employer can show that the claimant had the same condition in the past or a related condition, the judge will consider awarding a credit to the employer. Credits are dollars that come off the award. This is why employers should furnish post-offer medical exams to defense counsel, as these exams often reference a condition that existed at the time of hire. This is also why defense counsel review ISO reports, DMV reports and prior family doctor records.

Employers who are aware of social or athletic activities or second jobs that employees currently participate in should transmit this information to defense counsel. This information is directly relevant since it bears on the impact of the accident on work or non-work activities. So if the employer is well aware that the employee seeking a permanency award is actively golfing and playing basketball but that employee has told his medical evaluator that he can no longer do these activities, this information needs to get to defense counsel. In one case the undersigned had an employee with two surgeries to her leg who said that she could no longer golf as a result of the surgeries. The employer obtained a tip from a newspaper that the employee was an active member of a golf club and had won a best ball event. Our office contacted the golf club, which furnished the number of rounds that the employee played each week, and the Judge of Compensation reduced a very large award to a minimal award.

About the Author

About the Author:

John H. Geaney, an executive committee member and shareholder with Capehart Scatchard, began an email newsletter entitled Currents in Workers’ Compensation, ADA and FMLA in 2001 in order to keep clients and readers informed on leading developments in these three areas of law. Since that time he has written over 500 newsletter updates.

Mr. Geaney is the author of Geaney’s New Jersey Workers’ Compensation Manual for Practitioners, Adjusters & Employers. The manual is distributed by the New Jersey Institute for Continuing Legal Education (NJICLE). He also authored an ADA and FMLA manual as distributed by NJICLE. If you are interested in purchasing the manual, please contact NJICLE at 732-214-8500 or visit their website at www.njicle.com.

Mr. Geaney represents employers in the defense of workers’ compensation, ADA and FMLA matters. He is a Fellow of the College of Workers’ Compensation Lawyers of the American Bar Association and is certified by the Supreme Court of New Jersey as a workers’ compensation law attorney. He is one of two firm representatives to the National Workers’ Compensation Defense Network. He has served on the Executive Committee of Capehart Scatchard for over ten (10) years.

A graduate of Holy Cross College summa cum laude, Mr. Geaney obtained his law degree from Boston College Law School. He has been named a “Super Lawyer” by his peers and Law and Politics. He serves as Vice President of the Friends of MEND, the fundraising arm of a local charitable organization devoted to promoting affordable housing.

Capehart Scatchard is a full service law firm with offices in Mt. Laurel and Trenton, New Jersey. The firm represents employers and businesses in a wide variety of areas, including workers’ compensation, civil litigation, labor, environmental, business, estates and governmental affairs.

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The content of this blog is for informational purposes only and should not be construed as legal advice or legal opinion on any specific facts or circumstances. You should consult a lawyer concerning your specific situation and any specific legal questions you may have.